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EU sets deadline on resolving textile dispute
Updated: 2005-05-25 19:50

The European Union on Wednesday set an end-of-May deadline for China to resolve a textile dispute through informal talks or face possible restrictive measures at the World Trade Organization.

The EU head office decided to give its approval to continue informal talks with Chinese negotiators until May 31, noting progress in talks Tuesday, officials said.

The EU claims its textile industry has been seriously hurt by the opening of its market to Chinese exports on Jan. 1, losing production and employment. The United States already has imposed limits on Chinese exports.

"We have a green light," said Claude Veron-Reville, spokeswoman for EU Trade Commissioner Peter Mandelson. "The next deadline is the 31st of May. Either there is an agreement or there isn't."

EU spokeswoman Francoise Le Bail said if there is no deal EU trade chief Peter Mandelson could launch formal consultations with China, and those she said "cannot extend beyond 90 days." Under those formal WTO talks, she said, Beijing "is obliged to take self-restraint measures 15 days after the start of formal negotiations."

Veron-Reville said further talks between EU and Chinese negotiators in Brussels were being held Wednesday after discussions Tuesday between Mandelson and China's top textile negotiator, Gao Hucheng, made progress.

"Discussions will be ongoing throughout the week and as necessary," she said. "We think the atmosphere has been quite constructive."

Under the terms of China's World Trade Organization membership, if another member state can establish that Chinese textiles are disrupting the market, it may request bilateral consultations at the WTO.

During those official consultations China must restrict its exports to the EU to 7.5 percent more than the volume exported in the previous 12 of the last 14 months.

Last week, China announced new tariffs on its surging textile exports in a concession aimed at easing a clash with the United States and Europe over the textile trade.

Most EU nations on Monday backed the move toward restrictive measures, which would be focused to shelter European T-shirt and flax yarn sectors, hit hardest by the Chinese surge in exports.

Growth in T-shirt imports stood at 187 percent over the first four months of the year compared to the year-earlier period, and at 56 percent for the flax yarn sector.

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